Windlas Biotech Limited (NSE: WINDLAS) Q3 2025 Earnings Call dated Feb. 12, 2025
Corporate Participants:
Hitesh Windlass — Managing Director
Komal Gupta — Chief Executive Officer and Chief Financial Officer
Analysts:
Sudarshan Padmanabhan — Analyst
Abhishek Singhal — Analyst
Sajal Kapoor — Analyst
Miten Lathia — Analyst
Dhwanil Desai — Analyst
Ankit Gupta — Analyst
Rohan Vora — Analyst
Pavan Kumar — Analyst
Nitin Gandhi — Analyst
Disha — Analyst
Paras Chheda — Analyst
Neelam Punjabi — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Venlas Biotech Limited Q3FY25 earnings conference call. This conference call may contain forward looking statements about the company which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touch turned phone. Please note that this conference has been recorded. Today on the call we have Mr. Hitesh Viktas, Managing Director, Ms. Komal Gupta, CEO and CFO.
I now hand the conference over to Mr. Hitesh Ventlas. Thank you and over to you sir.
Hitesh Windlass — Managing Director
Thank you. Good afternoon everyone and thank you for joining us today. For our financial results for quarter and nine months ended 31st December 2024. We have uploaded the press release and investor presentation on our website as well as on the exchanges and I hope that everybody must have gotten an opportunity to go through it.
Initially I would like to discuss the outlook and way forward for Windlass Biotech followed by financial highlights for Q3 and 9 months FY25 of the company which will be shared by our CEO and CFO Ms. Komal Gupta. The Indian pharma market registered a 7% year on year growth in Q3 FY25 primarily driven by price increases as volume growth remained negative.
We are pleased to report a resilient performance as we have registered YOY revenue growth of 21% in nine months and 20% in Q3. This performance is driven by strong momentum in our trade, generics and institutional vertical complemented by consistent contributions from our CDMO and export verticals. The growth of the business development team, expanded customer base and introduction of new products are driving positive results in general formulation.
CDMO Vertical despite negative volume growth and API price reduction resulting in lower conversion, the trade, generics and institutional vertical continues to maintain strong growth trajectory. Our sales force has been broadened across both key and surrounding territories for this vertical enhancing our market reach. In January 2025, the injectables facility received Good Manufacturing Practices GMP certification from the Food Safety and Drugs Administration Authority of Uttarakhand following an inspection in December 2024 confirming compliance with WHO TRS guidelines in all five plants now of the company.
Accordingly, large customers have scheduled audits of our injectable facility in Q4 of FY25. Stability testing completion of production batches has taken in H1 FY25 has commenced in Q3 FY25 in line with our strategic roadmap Plan 2 extension is also now fully operational.
I will now request Ms. Komal Gupta, our CEO and CFO to discuss the financial performance highlights. Over to you Komal.
Komal Gupta — Chief Executive Officer and Chief Financial Officer
Thank you Hitesh. Good afternoon everyone. Our all time high revenue streak persists into the eighth quarter. For nine months FY25 revenue reached rupees 557.2 crores showcasing 21% YoY growth and Q3 FY25 revenue rose by 20% YoY to 195 crores. We are committed to enhancing our capabilities, expanding into new regions and providing high quality pharmaceutical products that address the evolving needs of our customers and patients. Our strategic initiatives and operational efficiencies position us for long term growth and value creation.
Our diversified product portfolio, strong customer relationship and dedicated team combined with strategic investments position us for consistent growth in our generic formulation. CDMO vertical this vertical recorded a 15% YUI increase in nine months FY25 to 407.9 crore rupees.
For Q3 FY25, this vertical generated rupees 135.7 crore in revenue witnessing an 8% YY growth. Our trade, generic and institutional vertical continue this growth momentum indicating strong market acceptance of the company’s product offerings.
In nine month FY25 revenue surged to Rs.126.6 crore rupees marking a 44% YUI increase. For Q3FY25 revenue increased to 49.6 crore registering 74% growth yoy. Our export vertical reported revenue of 22.6 crore in nine months, a 23% increase yoy with Q3FY25 showing a revenue of 9.7 crores reflecting 19% growth yoy. EBITDA surged by 22% yoy to 68.6 crores, 12.3% margin for nine months FY25 and by 21% yy to 24.6 crores 12.6% margin for Q3FY25 despite increasing depreciation by 9.7 crores for nine months FY25 and 3.6 crores for Q3FY25. Almost entirely due to injectable facility.
PAT stood at 44.7 crores up 9% for nine months FY25 yoy and 15.6 crores up 3% yoy for Q3FY25.
That’s all from our side. We can now begin the Q and A session. Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask question will press star and one on the touchdown telephone. If you wish to remove yourself from question Q you may press star and 2. Participants are requested to use answers while asking a question. Ladies and gentlemen, wait for a moment while the question queue assembles. The first question is from the line of Sudarshan from GM Financials. Please go ahead.
Sudarshan Padmanabhan
Thank you for taking my question, sir. My question is to understand, you know, more strategically on the Schedule M which is basically being pushed towards the end of the year. This, I mean is what, you know, it’s expected to be very positive for compliant players like us. So in that context, how do you one read this? Kind of a slight pushback and are we seeing, you know, more wallet share and more customers coming in, I mean, because of this?
Hitesh Windlass
I’m sorry, could you please. I maybe I can rephrase your question but the line was not clear. You are asking whether the regulatory scenario remains as strict and whether more customers are coming in because of the regulatory pressure on smaller competitors.
Sudarshan Padmanabhan
Yes, this is primarily on the schedule. So how do you see the Schedule M benefiting us and is there any impact on the pushback in terms of the deadline?
Hitesh Windlass
Yeah, so I think the Schedule M is definitely a move by the government which is. And by the regulator which is almost very, very strictly being enforced. Surprise audits are happening across the spectrum. And you know there is. We have also received audits and have passed in flying colors and continue to, you know, I believe even smaller. Many companies in, you know, different CMO belts like Baddi and even near Uttarakhand have had these audits and have been closed down.
So definitely customers are looking for more reliable, higher quality, compliant sources of manufacturing. And you know, we have been saying this almost, we had been anticipating this, we have been saying this since 2021, that this will have an impact on reshaping the industry. And we continue to see this.
In fact, the drug controller, the central drug controller, his term has now been extended by another two years. So we expect that this push for compliance will continue and those companies which are strong on the quality and compliance front will definitely benefit.
Sudarshan Padmanabhan
In that context, now that we are GMP cleared for the injectables, you know, because.
Operator
[Indecipherable]
Sudarshan Padmanabhan
Can you hear me now? Is it more audible?
Operator
It’s better.
Sudarshan Padmanabhan
Sure. So in that context, given that, you know, we have now it is up and running, how do we see the scale up in this facility and you know, how much of this facility is visibly booked in terms of orders with our customers. Just wanted to, you know, get some clarity in the Runway.
Komal Gupta
See the large customers, they, they are now setting up the audit at our plan. They do it, you know, once we have this GMP certification in place. So we have dates of many large customers in place and the audits are scheduled in Q4 of FY25. There might be more in Q1 of FY25.
So we’ll have to. Having said that, there is already some order book in place for our existing production happening and products getting ready for commercialization and out of stability batch. So that progression is happening to exactly say, you know, when do we really reach peak or when do we start giving a solid number? It’s difficult to say. But we already see a good momentum, very good responses out of the audits that have already happened and the queries that are coming in for our product portfolio.
Hitesh Windlass
Yeah. And we have been also 100% successful so far on each of the products that we have incubated in stability. So that all that product development and stability testing is also going as per our plan. That is the extent of what we can share as of now.
Sudarshan Padmanabhan
Sure, sir. So one final question before I back the queue. It’s a little operational, the cdm of course probably.
Operator
To join with the queue. Sir, please.
Sudarshan Padmanabhan
Sure, sure, no problem. Thank you.
Operator
Thank you. The next question is from the line of Abhishek Singhal from Perfect relative. Please go ahead.
Abhishek Singhal
Yeah, thanks for doing the question. Sir, questions around the injectable facility. Only one. Have we booked any revenues this quarter? Because our understanding was that you, you had indicated last quarter it will only start in Q4.
Hitesh Windlass
So very minimal revenue has been there. Very, very minimal. Abhishek ji already in Q3 but some will also clock in in Q4. But this is, you know, nothing to be, you know, to showcase. So this is very minimal because these are initial batches which have completed six months stability and they are now being shipped.
Abhishek Singhal
But the entire cost because now the plant is running full stream. So the entire cost that had to come on the operation side, I mean above EBITDA and below ebitda, there is a depreciation that is in the P L. That’s a fair understanding.
Komal Gupta
That’s correct.
Hitesh Windlass
That is correct. In fact, thanks for bringing that up Abhishek ji because this is where we also wanted to. You know, we have also mentioned in our opening remarks that we have been successful at carrying all this cost and still maintaining our operating margin. So, you know, that’s a lot of good work by the team to continue to maintain despite carrying the cost of injectables.
Abhishek Singhal
That’s very helpful, sir. If I recollect your earlier call, the communication has been that your CDMO is or gross margins are the least. The gross margins in trade generic institutional is better than cdmo and when injectables come into place, the gross margins of injectables are going to be better. So if I look at your bidding of your gross margin versus what your average GMs are currently, is my understanding correct?
Hitesh Windlass
These are the three layers of the gross margin. That is more or less correct, Abhishekji. On the injectable front, what will happen in the gross margin is while as an established business, when you look at the injectable dosage form, definitely the gross margins are higher than oral solids. And that’s the reason why we also ventured for this as it emerges. So if we look at it on a very granular or very fine scale, so some, some batches which we have done stability manufactured, those will get sold. So initially and getting into the account there will be some things. But overall eventually injectables is definitely a much higher gross margin business than Oracle.
Abhishek Singhal
So then the right interpretation is that now the great genetics scaling up to almost like 50 crore a quarter, hopefully Q4 and Q1, your injectable facility revenues start to flow in and you still as we stand today, maintained your gross margin flash EBITDA margin maintenance. So FY26 from what we report in FY25 as we look forward should show some operating margin. That is, I’m talking about EBITDA margin leverage. That’s a fair understanding of the way you look at it situation, right?
Hitesh Windlass
Yeah. I mean to the extent that, you know, because as the injection facility starts to generate revenue and it will first cross over, break even and afterwards start contributing to the margin.
So operating leverage will begin to come in in the numbers. But see, one of the things that we are trying to do is to be very conscious of our operating cost and improve EFFICIENCIES and those are also initiatives that we are working on. So in our space this is something that we always have to be on the top of and we are doing work on that.
So our goal, as Komal has also indicated in previous con calls, that over three, four year period of time you will definitely see significant change in operating leverage. But as we build the business out, we are not trying to sort of, you know, control cost to manage the numbers. You know, we are whatever the natural cost of operations is, is there.
Abhishek Singhal
That makes sense. And so one last question, more on the industry side. If I look at your peers, they have pretty much reported quite decimal numbers even this quarter. You know, the sector leader in your space that’s listed last quarter had guided to slow down revenues. We saw that in one of your peers this quarter now. And if I look at your CDMO growth, you know, of course you’ve had a phenomenal growth in the other two segments and injectables will help you going forward. CDMO at least this quarter was single, high single digits. So are you seeing some industry pressure or it’s more like a quarterly. Are you confident about how business is playing out some color on that?
Hitesh Windlass
So Abhishekji, we don’t see anything changing and maybe the size and scale of other peers is different or the therapies that they focus on is different or whatnot.
But we continue to do everything the way we have been doing. If you see in the last eight quarters the overall volume growth has been varying and we have through execution been able to do the growth that we have. And I believe that really at least we are not able to comment on what they have said.
We continue to significantly invest in increasing our business development team, improving, facing more quality audits, filing more DCGI permissions, increasing our mining with existing customers, adding new customers. All these initiatives that we have on our CDMO vertical, we are continuing to push on them.
Abhishek Singhal
Thanks sir, this is very helpful and congratulations on super numbers. Thank you.
Hitesh Windlass
Thank you.
Operator
Thank you. The next question is from the line of Susarshan Padvanaban from GM Financials. Please go ahead.
Sudarshan Padmanabhan
Yeah, is my line clear now?
Hitesh Windlass
Yes.
Sudarshan Padmanabhan
Yeah, yeah. Just taking a little, you know, forward from the previous participant on the domestic CDMO side. I mean, I understand last quarter there was a challenge in the volumes across the industry. I mean for various reasons just to understand, you know, with respect to, you know, if you break that growth, I mean 8% growth in the context one is that temporary slowdown that we have seen, is that the reason why I know the numbers are slightly lower than expected or is it also because the API prices, if it has come down and we pass it on and that is primarily also affecting us.
Just wanted to understand on the volumes and realization and how do we see the market itself picking up say in the next few quarters.
Hitesh Windlass
So I think what I can say see Mr. Van Mahmoud, I’ve always said that in our space it’s better to look at a longer span than a quarter because many variations can happen in terms of the production and shipping.
Some order get clocked in, some customers get the production done, but they say that hold inventory, we want it in the next month. So many things happen in a B2B environment. So I think when you look at on a YTD level, I feel that is more representative of things.
Especially now that we have nine month numbers. Probably that is a better thing and probably not worth reading too much into the quarterly for vertical wise that’s probably one thing. Maybe Komal, if you want to add something.
Komal Gupta
Yeah. Just to also touch upon the API thing that you mentioned. API prices have fallen down and there has been obviously some effect on conversion.
But having said that, there has also been increase in past and so API prices tend to have some impact because ours is a cost plus model in the long run it gets pacified plus as well as minus in API prices. So we have to look at it in the holistic view as Hitesh was mentioning. So we should look at annual performance for all the verticals is what we prefer.
But we structurally we would want to reemphasize that we do not see a huge change versus what was there. And volume growth has always been either negative or flattish. Very around 012% of growth in all the eight quarters that we are discussing.
So we are very sure that the sustainable effort that we are putting in CDMO vertical are sure to bring good results over a long term.
Sudarshan Padmanabhan
Sure, ma’am. One final question before I join back the queue is it’s quite heartening to see that we have taken all the operating costs on the new plant.
So I mean, given that the costs are largely in place, would it be a right assumption to basically believe that, you know, incremental sales on a quarter, on quarter basis with the new plant will have a disruptively higher, you know, flow through to your ebitda. And of course given that the depreciation is also already factored in, it should flow to the pack.
Hitesh Windlass
Yeah, for sure.
Right. That’s mathematical. As we add revenue, as revenue comes in first, we’ll get to break even and then it will start to contribute more and more to the operating leverage.
Of course, as the production also goes further in terms of volume against orders, then some cost may also increase. Right. But we believe that in the long run the our goal is also that how can we grow while.
So in some sense the injectable facility was a growth initiative and we are growing while keeping our margins in a healthy position. So every time, let’s say we have taken a very large outlay of injectable facility or any other initiative, then it would have had that much of a way down on the margin. So in some sense this is sort of a win win model and we want to continue to maintain it.
And I believe over the long run it will have a very strong leveraging effect.
Sudarshan Padmanabhan
Sure. Thanks a lot.
Operator
Thank you. In order to ensure that management is able to address questions from all the participants in the conference, please limit your question to two questions for participants. Do you have a follow up question? We request you to rejoin the queue. The next question is from the line of Sajul Kapoor from Anti Fleabel Thinking. Please go ahead.
Sajal Kapoor
Yeah, thanks. Good morning all. In the CDMO industry, typically the innovation patent is owned by the customer, right? And not the developer or the manufacturer. But in our case, we own 99% of the IP rights to all the products that we develop and manufacture.
So what advantage do you get from investing in IP and continuous R&D investments growing at roughly 20% CAGR over the last five, six years? I mean, can we sell these products in markets where there is no conflict of interest with our customers? Otherwise what’s the benefit of investing behind ip?
Hitesh Windlass
Yeah, that’s actually a very good question. And we have, if you see in our investor deck in the value chain slide, we have also clarified further the areas of the value chain and how we are operating. But see, if you do not have ip, then what are you selling? You’re only selling capacity, right? And so when you’re only selling capacity and your customer is providing you the material, you’re just converting so you job work, then you cannot have this kind of EBITDA margin.
Which industry will give this kind of EBITDA margins to only job workers? When you actually have ip, then you have the ability to use that IP and sell the same formulation, maybe with a different color tablet or with different packing material to multiple customers. Then you’re not essentially you’re not selling capacity. You have developed the product and you are able to take it to multiple customers and grow.
And that’s what we are Doing.
Sajal Kapoor
Yeah, yeah, definitely. No, that, that, that exactly what I was thinking and the reason for the question. So yeah, thanks for clarifying that, Hitesh. And the other question perhaps for you, Komal is on the ROCE slides. I’m looking at slide number 31. So we have got two rocees listed there and roes as well. So 27% including injectable and 38% excluding injectable. Right. So the question is when we get the operating negative operating leverage sorted on the injectable. So ramp up will be gradual FY26 and then FY27. Hypothetical scenario. If FY27 we get rid of all the negative leverage and on the. On the flip side we start getting some positive operating leverage. What Rosie, do you expect? Because we currently have 27% taking the pain of injectable.
Komal Gupta
Right. So we see improvements in so how we look at it at company level at all times we want to stay around 25 and more. So while injectables is going to be sorted, there will be additional capex coming in for our existing oral solids business. The capacity expansion that we are working on while plant 3 capex would completely be clogged in within FY25. But the plant 6 that we are working on for us to be able to reach 1000 crore for oral solids with the existing, with the facilities for that the additional capex would again come in. So there will be denominator would keep increasing with this capex and maintenance capex. But still we expect to remain up of 25. So around 27 will increase in a period and might come down but in long range we want to stay 27, 28 likes of ROC and more.
Sajal Kapoor
No, that that that’s helpful Komal. That’s all from my side. Thank you.
Komal Gupta
Thank you.
Operator
Thank you. Ladies and gentlemen, please limit your questions to two questions per participants. Do you have follow up question? We request you to rejoin the queue. The next question is from the line of Mitin from Factful Capital Investments. Please go ahead.
Miten Lathia
Congratulations again for outperforming the IPM growth margin. A couple of questions from me. You know, for your trade generic segment, the target that we had set of 3x in four years has already been achieved about a year earlier than what we planned. I wanted to understand two things about it. One, is it just about better adoption by the market itself or was there something else to it and hence how should we think about it going forward now that the earlier target is already passed?
Komal Gupta
Thanks Mitin. So it is a combination of external as well as internal market has been very good better than our expectation surely for trade generics and institutional and there have been a strong effort internally as well this was our focus area we have always been very clear about it we expected this to be the highest growing segment it did better than our expectation so going forward also we are very optimistic positive about trade and institutional vertical and also obviously CDMO and export but yeah.
Hitesh Windlass
I think that you know sometimes I think you know while various experts may have their own view the Indian pharma market data that is published does not really capture a large part of the trade generic segment because it’s being sold in the hinterland and that data I believe sometimes leads to us to say that market is slow but I think of course we are selling into the market we hear that other people also doing well A lot of our CDMO customers who are selling into the trade generic market they’re also doing well. You can see very large companies large pharma companies announcing their jump and foray into the trade generic segment.
So certainly all of this is happening on the basis of growth and growth expectations that people have on the institutional side also you see this high focus by the government on Jan Ashwathi Kendra’s how Ayushman Bharat has increased the number of consumers or people who were earlier covered in terms of medical expenses and pharmaceuticals. So all of this is leading to in the long run probably a large part of population of India which was not really getting access to quality drugs, getting that access. And our mantra has been affordable, accessible, authentic drugs.
So this is where we are, you know, we are in the middle of this opportunity and we have to make the most of it.
Miten Lathia
Great. Again on exports, I think if I’m not wrong, we hit the highest ever quarterly number in terms of revenues. If you could add color to it in terms of what worked or what is getting traction, it will be very useful. Thanks.
Komal Gupta
Yeah. So for exports we have seen growth versus last year, although maybe highest ever quarter number. Thank you for saying that. The overall nine month number 22.6 is a combination of three good quarters, third being the best I guess. So about 23% YUI growth for nine months is not bad. Obviously not to the extent that we would want to perform in export segment, but export, because of the lag that stays in our efforts and the results coming in, we hope to deliver much better in future for exports is what I would like to say with it.
Miten Lathia
Anything that you want to add in terms of the markets that are getting traction or how we should think about it over the next one or two years.
Hitesh Windlass
So we are certainly focused on the row markets in some semi regulated markets, plus one, South Africa, which is a regulated market. So these are the markets that we are currently operating in. We are adding more partnerships and we are adding more registration. Those queues are building up. So I think the kind of opportunity that India has with higher quality standards and the kind of opportunity especially that we have, you know, having a strong experience of eu, gnp facility, shipping, product and now looking to bring that same quality system and approach to all our markets, it’s going to have a very strong future even for the injectable.
I have spoken in the past that we want eventually to use a significant part of this capacity for exports where the numbers should be even better. So this is all the setup is to bring that exports number to a much larger contributor. How can we do that? Sort of the focus and it is very slow because you just have to file the dossiers and one, one and a half year of waiting and then the business starts and then it slowly picks up.
So there is an incubation period. But this is the sort of the cream in terms of how we can build towards. So in the long run definitely, but one, two years, very hard to say what should be there.
Miten Lathia
I have one more question on CapEx, but I’ll come back in the queue.
Operator
I request you to rejoin the queue.
Miten Lathia
Yeah. Thanks.
Operator
Yeah. thank you so much. Participants are requested to limit the questions to two questions per participants. So you have follow up question. We request you to rejoin the queue. The next question is from the line of Dhu Desai from Total Capital. Please go ahead.
Dhwanil Desai
Hi, good afternoon everyone and congratulations for a good start of numbers. So my question is on the trade generic side, I think on nine month basis we have done extremely well growing at 40% plus, if you can use some color on, you know, whether this growth is led by institution and generic. How, how should we look at it in terms of where the growth is coming from? And more importantly now we are at a much larger base. So to grow at a decent 25, 30% from here, what are we doing to grow from here? If you can talk a bit about that.
Hitesh Windlass
So we are actually not providing a split between trade generics and institutional. Part of it is also because in order to participate into institutional accounts, you need to have three years of having sold, manufactured and marketed that product. So a lot of our trade generic products are the ones that we are able to take into the institutional channel.
And so, and of course institutional business, as you can imagine, the rate contracts get issued and then it’s somewhat clunky in terms of which, you know, bulk supply happens and then, you know, the next supply takes some time for the next order to come from there. So instead of providing too much detail and then confusing everyone, we decided that let’s keep it as one. It is integrated.
Komal Gupta
Although maybe we can say that there has been good growth in both trade, generics and institution.
Dhwanil Desai
Okay, and my the second part of the question, how what are we doing to grow from a much larger base that we have now?
Hitesh Windlass
So the growth strategy doesn’t change because we have to nucleate new territories and we have to expand in the territories that we are already presenting and keep increasing the product portfolio. Product portfolio is the second level and third is sort of building upon the strong reputation of Windglass as a quality manufacturer because all our channel is seeing our presence not only in our own products, but also in all the manufacturing that we do, whether it is for someone else or our own selves.
So building on this reputation of 23 plus years and expanding the channel, expanding the, you know, geography, expanding the product portfolio, those are the essential moves there.
Dhwanil Desai
Okay, and second question on injectable, you know, on in terms of, you know, breakeven points, if you can talk at what capacity you think will reach breakeven point and tying in with that, you know, I think we, we were exploring getting into newer dosage forms and if you don’t find right acquisition candidate, maybe organically also. So how, how are you thinking about it, you know, whether once you cross that breakeven point you’ll start, you know, looking at kind of going organically into newer dotage form. Any thoughts on that?
Hitesh Windlass
Yeah. See on the OPEX side for injectables, as we have clarified in the past, we are a cost plus business and talking about dosage form specific OPEX is not competitively wise for us. So we have not disclosed those numbers because it can impact us adversely by revealing our cost basis to our competitors.
So to your other question around whether we will look at growing inorganically as our injectable business stabilizes. Certainly. And we have been still always been looking and of course always with this eye that we have to have a justified addition should not be just a balance sheet play.
It needs to make strategic sense for us expand our ability to offer in all three segments products from that plant. So we have been looking at Derma as an area. We have been looking at some other dosage forms like protein powders.
We have been looking at many others. So far none of those have been something that we would want to jump on. But that search is on and.
Komal Gupta
Yeah. And once injectable stabilizes if you don’t find anything outside we would surely go for organic.
Dhwanil Desai
Okay. Thank you. All the best.
Hitesh Windlass
Thank you.
Operator
Thank you. The next question is from the line of Ankit Gupta from Bamboo Captain, please go ahead.
Ankit Gupta
Yeah, thanks for the opportunity and congratulations for a good set of numbers.
Operator
Speak little louder please.
Ankit Gupta
Sure, I’ll do that. Congratulations for a good set of numbers and thanks for giving me an opportunity. So my first question was on, you know Komal, will it be possible to highlight, you know what will be our losses on the injectable plant in the 9 months amkit as Hitesh was just mentioning because our model is cost plus model we would generally not share specific to injectable opex because that is probably competitive in that sense. But depreciation number surely I’m sure you must have looked at the opening remarks. So injectables number is very clear. The increase. So let’s say you know, 2122 crore kind of run rate that we had on the employee cost side in last year on a quarterly basis. So that has touched almost 32 crore in this quarter.
So how much of that will be attributable to let’s say our own, you know, increments plus expansion in our marketing team or some other employee cost increase. And how much will that be because of the injectable plant coming in. If you can just give some highlights on that.
Komal Gupta
Yeah, so I can, I can segregation while it’s difficult to provide. But I can tell you the reasons for increasing personal cost and you know we might look at it. You are right. There have been increase in our business development teams in all three verticals. So that surely is in place. Increment and increase in production stay as the reason. Injectables related manpower increase is also one of the reasons. And then as we had mentioned two quarters back there has been in Uttarakhand the minimum wage has increased by more than 25%. So that has also brought in increase in our overall personal cost. So the increases combination of all these factors difficult to provide the number against each other.
Ankit Gupta
Please. You were saying.
Komal Gupta
One thing that I missed mentioning is also ESOP which was introduced last year. So last year it was there for I think only five months and this year it is going to be there all 12 months. That is also another reason.
Ankit Gupta
This is my second question I think if you can allow me. Yeah. So my on the injectable plant, will it be possible for us to break even in next financial year given how the inquiries are. We have cleared the the audits as well. So you know, will it be possible for us to break even at EBITDA level as well as you know, at the PBT level on the injectable plant next year? So we have not given any kind of guidance. Right. So of course the goal of the entire management is to achieve the breakeven milestone as soon as possible. But we have not given any guidance and we request you to let us stay in that. But let’s say you know, the kind of inquiries that you are getting in from the customers, the audits are cleared.
So any qualitatively indication that you know, how you know on the injectable front, how do you see next year for us?
Hitesh Windlass
Sir, I just requested no indications.
Ankit Gupta
Okay.
Operator
Thank you. The next question is from the line of Rohan Vora from Envision Capital. Please go ahead.
Rohan Vora
Hello. So thank you for the opportunity and sir, congratulations on the numbers. So the first question was on the injectables business. So you know, when we start getting in business, so would this be, you know, the molecules moving out of our customers manufacturing facility to our facility or are we looking to gain market share as in, you know, there’s some other CDMO manufacturing and now the manufacturing moves to us. So what kind of contracts are we expecting here? That was first. Thank you.
Hitesh Windlass
So when we were embarking on this project almost now, you know, in the design phase almost three, three and a half years back when we did a survey of all the injectable facilities currently available and you know, supplying in the CDMO space and we had a lot of discussions with our customers also One of the common factors that came out was that the GMP situation or the compliance level or quality level of many of the facilities was very, very iffy and customers were facing lot of challenges in getting sustainable and reliable supplies for injectables. And this was also due to the fact that a lot of the injectable capex in those old plants also was very, very old and the guidelines had become very strict over the last 10, 15 years.
So you know, only some real, you know, upgrading can happen in injectables. You cannot really completely change the things. So that is one of the reasons we also ventured in because we felt that we would be a viable alternative to our customers who are getting this manufacturing done either outside at manufacturers whose plants are very old or no longer compliance friendly or even to their own plants where they would want to maybe shift towards exports or to other products.
So it is an alternate for both. It is a way to our expectation of gaining business in injectables will be driven by both customers outsourcing from us and also shifting their outsourcing from very old and poorly maintained facilities to a brand new facility like us.
Rohan Vora
Got it sir. This is really helpful. And the second question was not to nitpick but what we see is, you know, in the CDMO vertical we are at that 135, 136 crore kind of 100 for the last three, four quarters. And I understand that there has been erosion in the EPI prices. However, is there anything else, you know that is also impacting that particular vertical? So that was a question.
Komal Gupta
Yes. In fact as we have been saying we should not look at any quarter number because there is always some impact coming in from earlier quarter and some going to the next quarter. So it’s good to look at CDMO trade generics, institutional as well as exports numbers on an annual basis is what we like to say. While obviously every quarter we give the numbers and yoy. But you know it’s not a good idea to focus on a quarter number. As we mentioned earlier, there’s no strategic, you know, specific change that we are seeing. We continue to stay very positive on CDMO vertical as well, like all the other verticals.
Rohan Vora
Got it. Thank you. I will get back in the queue.
Komal Gupta
Thank you.
Operator
Thank you. The next question is from the line of Pavun Kumar from Ratna Tria Capital. Please go ahead.
Pavan Kumar
Hi. So I wanted to understand what are the targets in terms of capacity utilization for injectables next year and also by what time do we think we can make, we can get, get it to be. I mean we can start exports from that facility. I mean are there any other steps post GMP accreditation that we need to go undergo to get this facility to export or how are we looking at it overall?
Komal Gupta
Like our existing oral toilets and oral liquids business. We continue to not give any guidance in terms of revenue, capacity, utilization etc. But as we mentioned GMP certificate is in place. The customer audits are happening as we speak. We are getting queries. So specific number difficult to mention number one. And about exports, while we have started working on it and there are a lot of initiatives taken internally but it would take a lot of time. So probably that is why we haven’t even given any specific update in terms of injectable exports because that will take a lot of time and would need everyone to be extremely patient. For what?
Hitesh Windlass
Basically export products are developed to the specifications. Of the product in those markets. So British pharmacopia, US Pharmacopoeia. And so it requires separate stability batches. And then after that stability batches are done, you compile the dossier and file in the country. We then that takes about one and a half to two years of review and approval time. And meanwhile plant approval also has to happen and then the inspection gets triggered which they come and do.
So all these steps make you know this as but of course you know you get the very high margins also in those markets because they literally have no domestic production. So this is the reason why export is a little bit sag ended. And however we have already we have done our product selection.
We are working on taking all the steps that are required to expedite wherever we can. We have had our conversations with our export customers. All of that is ongoing.
Pavan Kumar
Can you at least give us an indication of when maybe at an EBITDA level the facility injectable facilities breaks even and also see if injectables basically exports is going to take time. My current understanding would be the ROC on injectable facility is very low. So what are we going to see first is the doubling of the capacity in injectables or the exports?
Hitesh Windlass
No, it will be very good outcome. Right. If we have to double the capacity in injectables because there are so many orders that we cannot supply, then it’s a very good outcome. Why would we try to either place either one of them in front? They are parallel effort, they are parallel streams. Now as we file in various markets, some permissions will come. Some market will have different timing compared to others. And while the facility is continually being used for India, even in India business, the gross margin for injectable will be very high than gross margin for old solids. So from a financial perspective, this is all it’s a win win. Right. As long as we can, you know, ensure that the ramp up is very fast. It will bring very good results. And that’s what our focus is. We are simply just not giving the guidance to you on that. Right. That’s all. But all the activity.
Pavan Kumar
Got it. Hitesh. Thanks.
Operator
Thank you. The next question is from the line of Nitin Gandhi from I knowcus Advisors. Please go ahead.
Nitin Gandhi
Thanks for taking my question. Can you give breakup of investment in financial assets? Sorry, can you please repeat the question? Can you give breakup of investment under financial assets?
Komal Gupta
Sure, one second. So about. So we have money lying in mutual funds upwards of 200 crores. There is some mutual funds, includes liquid funds, debt funds. There is Also fixed deposits of about 15, 16 crores. Some money lying in cash in bank and you know, minus CC utilization. That keeps happening and keeps changing.
Nitin Gandhi
Major MF and FD breakup I got. Thanks. And second is what is the two investment in injectables.
Komal Gupta
Investment in injectables about 75 crores.
Nitin Gandhi
Then depreciation which you have said which is almost 13 crore excess. Is it? Can you just reconcile that for me?
Komal Gupta
So we follow WDB method which tends to have higher heavy. Of course the breakup would be plant and machinery building, etc. I think.
Nitin Gandhi
So the WDB is 30%.
Hitesh Windlass
Yeah, I think the. In a previous con call we had also mentioned some wdb, you know.
Komal Gupta
It changes asset to assets. But yeah.
Nitin Gandhi
I can take it offline. I think that’s okay. 35 crore is a major investment and 13 crore on WDB basis. I’ll take the rate separately. And what’s the target asset turnover? That’s the corollary of that question.
Komal Gupta
It probably would be a good idea to look at at the year end.
Nitin Gandhi
No, I’m saying at optimal level, not one year or two years. What’s the expected asset? Or
Komal Gupta
You’re asking for injector.
Hitesh Windlass
Injectable as a turnover. Typically if you see most pure injectable companies it will be between the range of 1.2, you know, depending. And of course if you start exports then it can be a little bit higher. If it is mostly domestic then at least you know, 1.1, 1.2.
Nitin Gandhi
Okay, thank you very much.
Operator
Thank you. Ladies and gentlemen, please limit a question to one question for participants. Do you have follow up question? We request you to rejoin the queue. The next question is from the line of Abhishek single from Purpleity. Please go ahead.
Abhishek Singhal
This had a follow up question from the previous participant. You mentioned the aspect turn of around 1.2, 1.3 on the injectable side. Now if I understand correctly, in the past interaction you mentioned that given it was a greenfield capacity, civil structure and all was put in place, the first phase came out to be somewhere around 75 crores. Now in a scenario where you have to double your capacity would be like just adding one more floor. And we’ve seen that facility in that scenario double your capacity, the incremental would just be planned and machinery which I think would not be more than 25 crores at the max. So technically if you’re looking at optimal utilization of your intellectual capacity over the longer term, let’s say three years out, then 7025 would mean like 100 crores. Kind of an investment. And if you 1.2 on the primary stuff with the doubling of capacity would mean like more two, two and a half times the capacity. So where is my math wrong if I take more like a three, four year view on the injectable asset that you have put.
Hitesh Windlass
So Abhishekji See there are a lot of assumptions in that you know, calculation. So for example, like when we say okay, double the capacity, right? But if is that the right thing that we would do because you know we would add within injectables there are a lot of other variant dosage. If we go more for lyopolisation or more for pre filled syringes or some other areas where we see a lot of there might be better opportunities in terms of the markets that we are chasing for exports. I’m talking about. So all those things will change. So my sense that what I was talking about is primarily the question the previous query was about what is a typical asset turn for a domestic CDMO injectable company. That’s where I said it was about 1.1 to 1.2. We are going to start like that. But as we add capacity and as we add markets and we could go towards exports these things will very much change. So you know, I was giving more sort of around what the domestic numbers are typically.
Abhishek Singhal
Got it sir. Thank you very much.
Disha
Thank you. The next question is from the line of Disha from Sofia Capital. Please go ahead. Firstly, congratulations on a great set of numbers. So as we said before, like inject the injectable facility only the cost has been factored in. Revenue will start flowing from like next year. What will be your guidance for revenues in FY25 and FY26? And also what margins will you be expecting?
Hitesh Windlass
Thank you for the question. Thank you for the question. But as I mentioned we are not giving the guidance so request that we stay like that. There was a second part to your question. What was that?
Disha
I was just expecting. So like the EBITDA margins, what range? Like will you be expecting that?
Hitesh Windlass
Again, it’s a question of guidance.
Disha
Yeah, all right, all right.
Operator
Thank you. The next question is from the line of Paris Chada from Purple One Vortex Ventures. Please go ahead.
Paras Chheda
Yeah, most of my queries have been answered so I just got only one thing to ask for is what is. I mean there are two things basically what is the current capacity utilization across the four plants that we stand today? Operationally that’s number one. And secondly on the inorganic growth front, you know, we’ve been sort of at least somehow been able to beat the industry growth and do well. So what sort of, you know, factors will face as of now in terms of, you know, acquiring or leasing in a facility and you know, grow because, you know, eventually when the industry grows, we’ll have that leverage. Additionally, I’ve been, you know, sort of tracking, we’ve been on the lookout, but it’s still not happened. So these are the two questions that I have.
Hitesh Windlass
Yeah. So with respect to the inorganic, let me answer that first. Several quarters ago we were very close to identifying something. We even incurred some diligence costs. But then we found out some adverse issues and this declined. There are a lot of investment bankers whom we have given a very good and a very clear brief about what we are looking for. And from time to time several proposals also come for us.
The most important thing right now is that we have one of the strongest balance sheets. We have a strong growth momentum and we are being very choosy on the inorganic side because aside from having the opportunity, it is also, you know, we don’t want to be in a situation where there will be hidden or unknown issues that, you know, end up taking too much management time. So we are looking for good assets.
And that’s sort of been, you know, the reason why we have been so far not been able to close on anything. And I again am not setting a timeline that we have to do a deal by the state. It has to be dependent on what the opportunity is and whether it makes sense. So that’s on the inorganic side. Your other question was on the capacity. On the capacity side in Plant 2 extension we have expanded which has come online this quarter now in Q4.
And so I don’t think that much would have changed in the plant 1, 2, 3 and 4. Maybe a few percentage points up, but more or less adding the capacity here in Plant 2 extension. So although we give the utilization numbers on year end, right?
Komal Gupta
Yeah. So we have sufficient capacity for our oral solids and oral liquids business to reach across about 800 crores. This is a side of injectable. So that much capacity with plan to expansion is in place now.
Paras Chheda
Okay. So there is still room for further growth in FY26.
Operator
Yeah, thank you. The next question from the line of Neelam Punjabi from Purpose, please go ahead.
Neelam Punjabi
Yeah, thanks for the opportunity and congratulations on some great set of numbers. My question is on the capacity. So you mentioned that we have investments in place with the Plant 2 expansion and injectables for taking the overall top line to 1000 crores. Right. And we’ve already hit the 200 crores as an annual 800 crore run rate on a quarterly basis. So what is the planned capex going forward to take our revenue beyond thousand crores?
Hitesh Windlass
So Neelam, actually what we had spoken about earlier, a small correction in what you just said is that along with plant 6 which is the brownfield project that we acquired last quarter, we will build that out and then by finishing that we will reach 1000 crores. And in terms of our strategy for growth, you know our model is slightly different from others. We try to do a two to three year window of expansion rather than five to six year window of expansion.
Neelam Punjabi
Understood sir. But if you can just tell me what’s the incremental CapEx that we are planning over the next couple of years.
Hitesh Windlass
I think that you know one upcoming CapEx will be primarily for Plant 6 bringing up which is the oral solid expansion and we are in the layout and machinery identification selection process. So I request that you know, I be allowed to comment on this query by end of March.
Neelam Punjabi
Sure, no worries. And just lastly if you can give me a couple of bookkeeping questions. What’s the net cash as of December and what is our working capital days?
Hitesh Windlass
So again Neelam, since you know those are not part of lr, we are not sort of disclosing those numbers but we are still within range of what we have been typically.
Neelam Punjabi
Got it. Thanks a lot.
Operator
Thank you. That was the last question for today on behalf of Bitla’s Biotech Ltd. That concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.
Hitesh Windlass
Thank you.
Komal Gupta
Thank you.